Introduction to Altcoin
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Hi friends, trust you're good and keeping well. It's my pleasure to bring to you once again another interesting content. I have no doubt that you got value from the last post I made on Exchange.
Today we would be looking at yet another topic which borders around Altcoin. Let's get into it...
When you hear about coin, especially when it's not in the contest of fiat, what then comes to mind is cryptocurrency. The first crypto currency which is also the mother of all coin came on the scene in 2009. Satoshi Nakamoto is believed to be the brain behind this noble cryptocurrency.
Although no one seem to know who Satoshi is but in my opinion, I do not think it matters, what matter is that he birthed a revolution that is positively affecting us even today.
After the birth of Bitcoin, other coin have surfaced. As at today we have coins and tokens in their thousands.
Having given us a background information about cryptocurrency which I use interchangeably with the word coin, I would love to explain what altcoins are.
To simplify the term, I would like to come from this angle by breaking the term altcoin into two parts.
The first part is Alt while the second part is coin.
Now I want you to know that the alt there means *Alternative and then the coin has it literal meaning.
Combining both then gives us alternative coin. In English we know the word alternative means another option. By now I believe you've gotten the picture and the destination of this definition.
To further simplify and summarise the whole definition, I would say, Altcoin is any coin which is not Bitcoin, that is coins other than Bitcoin itself.
Some other people hold the belief that Altcoin are coins other than Bitcoin and Ethereum which seems to be the only two most established coin. Whichever school of thought you feel comfortable with is fine.
Its important to note that developers came up with these coins (Altcoin) based on their desired purpose or use case.
I also want to mention that most Altcoin are forked from the two most established blockchain which are Bitcoin and Ethereum. What developers then do at this point is to rename the forked version and ensure that it's an improved version of the old chain. Bitcoin and Bitcoin cash is a typical example.
In this section we would be looking at the different types of Altcoin we have. This difference is actually based majorly on functionality, funny enough some coin fall into more than one category. Anyways let's delve into it.
- Payment Token
Do not try to process what this could mean in your head because it's just as the name implies. These coins are used to facilitate payment and a very good example is the Bitcoin, the very first and foremost coin.
- Stablecoins
Stable coin brought a lot of stability to crypto volatility. You can't take away volatility from the market, you can only manage it to reduce your lose. Here is where stablecoin comes in, it aim is to peg an asset to another stronger asset such as fiat, metal or other stronger cryptocurrency. I.e a coin can be pegged to a Dollar in ratio 1:1 just as seen in coin like USDT, USDC etc.
- Security Tokens
These are tokenized asset that can be found on the stock market. The way it works is that the value of an asset is transferred to a token such that as long as the asset remains and is secured the token is valuable and can be issued out to investors.
The idea here is that the token is acting as a representative of something valuable. It also important to note that security token are supervised and regulated by security and Exchange commission.
- Utility Tokens
These are the type of Altcoin that is used within a blockchain network for the smooth running of the chain.
Within the chain are activities such as payment of network fees, redeeming of reward, purchases and the likes. Utility token comes handy here as it helps in fixing all of these.
A very good example is the Ether as its designed to be used in the Ethereum blockchain for transaction payment. Another is filecoin. These token can be purchased on exchanges but then it functionality is within a blockchain network.
- Meme Coin
These are coin with no clear purpose or use case. They were birthed out of some kind of joke or taunt at well established coin and then hyped to attract investors. They are not designed to thrive for long, they are just for a while as they have no solid use case.
Doge coin is one of these, it's still thriving today because of the few modification that have been introduced over time since it creation.
- Governance Tokens
This kind of coin talks about authority, it gives it holder specific right within a blockchain. With these token one can vote, decide and be part of the business on the chain. Since they are token used within a blockchain network, they also play the role of a utility token.
There you go, I trust you've gotten value from this post. Feel free to share your thoughts with me concerning this topic, perhaps you have one or two things to add..it could even be some sort of correction. Thanks for your time. Gracias!
Regards
@lhorgic♥️
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Hi @lhorgic,
It is innocent post, i appreciate your work. but it is not a suitable place for sharing these types of crypto post here, we will recommend you to join our Tron Fan Club community and publish your crypto base posts here. this community is design for crypto lovers. Next time, please share these types of post in TFC community.
Thank You!
I guess there is a mix up somewhere then, an MOD actually recommended on one of my post few days ago that crypto post can be shared here alongside my activity as a moderator in my community. I feel a bit confused with this comment right now prohibiting crypto related post here.